With teens chewing less, gum manufacturers change ad strategies

Wrigley tugs at heartstrings with new ad campaign; Mondelez focuses on benefits, switches to less-traditional outlets

September 08, 2013|By Robert Channick, Chicago Tribune reporter

In this commercial for Wrigley's Extra gum, a father gives his daughter an origami crane made from a gum wrapper. (Wrigley photo)

"Who wants gum?" was a question asked in countless Trident commercials over the years. Now stuck in a multiyear sales slide, gum manufacturers are asking themselves the same thing.

With teenagers, the core chewing constituency, increasingly bypassing the gum aisle, Chicago-based Wrigley recently launched a new ad campaign for its Extra brand reaching for broader appeal — and perhaps a few tears.

Eschewing functional benefits — fresh breath, dental hygiene and weight loss — the evocative television spots represent a dramatic departure from the pack. In a series of scenes, a father shares Extra gum with his daughter as she grows up, making origami cranes out of the wrappers. While packing her up to leave the nest for college, a box of origami cranes spills out of her car, a poignant moment reflecting a bond that goes far beyond gum.

"This really hits on the emotional reasons that people chew gum," said Anne Marie Splitstone, senior gum category director at Wrigley. "I'm trying to get everyone who's interested in gum to remember this consumer truth about liking to share gum, and the little simple pleasures of doing so."

The theme of the campaign, "sometimes the little things last the longest," is an evolution of Extra's traditional positioning of long-lasting flavor, and a new direction for gum advertising, where quirky, cutting edge and comedic messages abound. While it remains to be seen if the new campaign will be successful, analysts believe the gum category will have to increase ad spending, raise its profile and reposition itself to energize stagnant demand. Gum sales have steadily declined since 2010, driven by a confusing proliferation of brands, lofty price points and a lack of pocket change among target consumers — teenagers who have been especially hard-hit by the recession.

"The unemployment rate has been high; consumers tend to chew gum while they're working," said Morningstar analyst Erin Lash. "And the unemployment rate is even higher among teens, who tend to be heavy users of gum."

The downturn hits close to home in Chicago, the unofficial gum capital of the world with Wrigley and Mondelez — the top two manufacturers — both based in the area. Together, they represent about 90 percent of total U.S. gum sales, which last year totaled $3.38 billion, according to IRI, a Chicago-based market research firm.

Sugarless gum accounts for 84 percent of sales, with Wrigley's Orbit leading the way at $454 million, followed by Mondelez's top brand, Trident, whose sales total about $403 million through 52 weeks ending Aug. 11, according to IRI.

Wrigley was founded in Chicago by William Wrigley Jr. in 1891 as a soap company. It started producing gum the following year, launching such iconic brands as Juicy Fruit and Spearmint shortly thereafter. More than a century later, Wrigley remains the world's largest gum manufacturer, with Orbit, Extra and 5 among its top-selling brands.

In 2008, the company was acquired by the privately held, Virginia-based Mars candy company for $23 billion. While still headquartered in Chicago, Wrigley moved from its namesake building on Michigan Avenue to new digs on Goose Island last year.

Deerfield-based Mondelez, an international snacks business that emerged from last year's split of Kraft Foods, is a more recent but nearly as significant player in the gum world. In 2010, Kraft acquired Cadbury in a $19 billion deal, adding top gum brands Trident, Stride and Dentyne to its portfolio.

Credit Suisse analyst Robert Moskow said the chewing gum category has suffered from a lack of management and investment since Mars took over Wrigley and Mondelez took over Cadbury.

"These are two very big confectionary companies, and it makes all the sense in the world that they would have some synergies with chewing gum, but chewing gum is a very different kind of category," Moskow said. "Something got lost in the translation as they tried to integrate chewing gum."

U.S. gum sales are down more than $300 million since 2010, and the decline is accelerating this year. Sales have dropped 6.4 percent to $3.24 billion through the 52 weeks ended Aug. 11, according to IRI.

Among the problems, according to Moskow, has been an overwhelming number of choices at the checkout line, offering everything from faux pie dessert substitutes to flavor-changing gum. Wrigley experienced a flameout in May when one of those varieties, its Alert caffeinated gum, was pulled from the market after the Food and Drug Administration announced an investigation into the effect of additional caffeine consumption on children. The company said it has paused production, sales and marketing of Alert and will reassess the situation at the beginning of 2015.

Splitstone acknowledged that there are just too many choices for most consumers' tastes.